Break-Even Calculator
Enter your fixed costs, the price of one unit and the variable cost of making it. The calculator returns how many units you must sell to cover your costs.
Result
- Units to sell (rounded up)
- 500 units
- Contribution margin per unit
- 20.00
- Contribution margin ratio
- 40%
Formula
- Contribution margin = price per unit − variable cost per unit
- Break-even units = fixed costs ÷ contribution margin
- Break-even revenue = break-even units × price per unit
- Units for a target profit = (fixed costs + target profit) ÷ contribution margin
How the Break-Even Calculator works
Fixed costs such as rent and salaries do not change with sales. Variable costs such as materials rise with each unit sold. Each sale contributes its price minus its variable cost toward covering the fixed costs.
The break-even point is where total contribution equals fixed costs. Below it the business loses money, and every unit above it adds one contribution margin of profit.
Worked example
With 10,000 in fixed costs, a price of 50 and a variable cost of 30, each unit contributes 20. Break-even is 10,000 ÷ 20 = 500 units, which is 25,000 in revenue.
Frequently asked questions
What is a contribution margin?
The amount each unit sold contributes toward fixed costs and profit: the selling price minus the variable cost of that unit.
How can I lower my break-even point?
Reduce fixed costs, reduce the variable cost per unit, or raise the price. Each one increases the contribution available to cover fixed costs.
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Calculations run in your browser and nothing you enter is sent to a server. Results are provided for general information. Check critical figures independently before relying on them.